Currency report: Strong finish to the week

The złoty's strengthening trend was stopped by a decrease in the EUR/USD exchange rate just before noon on Friday, from $1.2632 to $1.26, which translated into profit taking and a weakening of the Polish currency. However, the currency recovered and gained 0.1 percent against the dollar, trading near two-month highs.

The technical situation on the EUR/PLN cross and USD/PLN cross after Thursday's strong fall of both pairs currently clearly prefers the Polish currency, especially against the dollar. The EUR/PLN graph has a weaker decrease potential. A bigger demand can be expected around zł.3.85, where the support level is marked by an August minimum.

A Federal Reserve meeting next week in the US will likely dictate trading as the week progresses. Indications are that the US economy is heading for a soft landing, which has raised investors' appetite for risk. The Polish central bank is also meeting next week but no rate change is expected.

Marcin Kiepas

X-Trade Brokers Dom Maklerski SA